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Brazil Selects 14 Entities for Digital Real CBDC Pilot Program

source-logo  thecoinrepublic.com 27 May 2023 01:31, UTC

For the Pilot program of digital currency (CBDC), the central bank of Brazil has selected only 14 institutions. The list includes some major local private banks such as Bradesco, Itau Unibanco, Nubank, Banco do Brasil, and the local stock exchange B3.

On the other hand, some multinational companies like Visa and Microsoft were also chosen to participate. The central bank of Brazil launched its digital currency pilot program in March. For this CBDC pilot program, the bank has selected 14 participants.

Till mid-June 2023, the central bank will begin incorporating participants into real digital pilot platforms. The bank receives 36 interest proposals from 100 institutions. These institutions include financial sectors, cooperatives, crypto companies, payment institutions, public banks, etc.

Digital Real Public Use Will Start Soon

By the end of 2024, the public use of the digital currency will probably begin. It is scheduled late because it will be implemented in full flow after the testing phase. This phase will include the buying and selling of federal public bonds among individuals and its related evaluation.

The “Digital Real” will be designed as a means of payment. It will use distributed ledger technology (DLT). It will provide the foundation for retail financial services. Tokenization deposits in Brazilian financial institutions will settle this.

Not to mention here, Digital Real is Brazil’s official future virtual currency. This is Brazil’s CBDC. The central bank of Brazil will provide the supported technology. Hence, it is clear that digital reality is not cryptocurrency.

It will have full assistance from the Brazilian Monetary Authority. It has some important features. It can be exchanged with the traditional real. Traditional real and digital real will have the same price. And also, it will be an extension of the traditional currency.

Many Other Countries Working on CBDC Projects

Besides Brazil, many other nations are working on their respective CBDC projects. In the past week, Hong Kong Monetary Authority announced the launch of its e-HKD Pilot Program.

For Hong Kong’s CBDC program, 16 FinTech firms are prepared to participate in the trial run. From the crypto space, Ripple Labs is the only representative. The settlement of tokenized assets is one of the use cases of this program.

Brazil has joined the race of CBDC in September 2022. It is also cooperating with many traditional cryptocurrency industries. This is the general trend followed in most of the countries, while some others, like Argentina, start pushing back against cryptocurrencies as its central bank restricts the payment service providers from offering digital assets transactions.